An estimated 100 million adults in the United States carry healthcare debt, with about 800,000 residents struggling in Los Angeles County alone. To combat this crisis, public health officials are deploying an upstream prevention model, rolling out a digital presumptive eligibility system designed to automatically screen low-income hospital patients for financial aid.
In Plain English: The Clinical Takeaway
- Presumptive Eligibility: A software-driven process that automatically qualifies low-income patients for hospital financial aid using public information such as credit history, removing the need for a cumbersome application.
- Upstream Prevention: Public health intervention targeting the root causes of financial distress before patients skip vital prescriptions or avoid doctor visits due to mounting bills.
- Charity Care: Free or discounted hospital care for qualifying low-income individuals, which many eligible patients miss due to a lack of awareness.
Tackling the Vicious Cycle of Medical Debt in Los Angeles
At a small public clinic located in the San Fernando Valley area of Los Angeles, Naman Shah evaluates tuberculosis patients every Tuesday by reviewing medication regimens and inspecting scans of damaged lungs. It is part of an initiative dating back to the early 20th century to control infections so tuberculosis doesn’t spread. “We like doing things upstream,” Shah said, meaning before they happen, rather than after the damage is done. Now, Shah and his colleagues at the Los Angeles County Department of Public Health are applying that exact preventive principle to medical debt.
Public health officials calculate that roughly 800,000 residents in LA County—the nation’s most populous—are burdened by unpaid medical bills. “The impacts of medical debt were staggering,” said Shah, who since 2023 has led a county initiative in LA to tackle the debt problem. “People end up with credit card debt and then a vicious cycle of high interest rates and poverty. People forgo their prescriptions. People forgo appointments. And then you get into worse health.”
Hospitals typically offer financial aid to patients with low incomes. Information is hard to obtain, applications are cumbersome, and eligible individuals often slip through the cracks. “Most people walk into the hospital and walk out without any knowledge of financial assistance,” noted Jared Walker, founder of the nonprofit Dollar For. This breakdown drives costly collection efforts that Adena Tessler, regional vice president for the Hospital Association of Southern California, described as “turning their wheels trying to collect on debt that isn’t collectable.”
Implementing Automated Screening Across LA County Hospitals
To fix the breakdown, health officials are turning to presumptive eligibility. Software automatically screens and qualifies low-income patients by checking publicly available information such as credit history, eliminating paperwork barriers entirely. Hospitals deploying these systems have reported as much as a 50% increase in the amount of financial aid they give patients, according to Shah.
California passed a state law last year mandating that all hospitals start doing presumptive eligibility screening by next July. However, software implementation remains expensive and complex, particularly for smaller hospitals. Currently, only about 1 in 5 hospitals in LA County utilize these systems. To bridge the gap, the county public health department brought together healthcare and hospital officials in the county to figure out another solution.
While the county’s public health department faced major fiscal challenges, it leveraged its convening power. “The beauty of government is not when it always has to do the work,” Shah said. “We have the ability to make sure that people cooperate.”
The Hospital Association of Southern California agreed to procure a digital presumptive eligibility system and make it available to its members. Paul Young, a senior vice president with the association, compared the procurement strategy to “a Costco model” designed to lower software costs for individual hospitals. Simultaneously, a $2 million funding commitment was provided by L.A. Care, a nonprofit health plan administering Medicaid benefits to more than 2.5 million low-income residents across the county, to establish the new infrastructure.
“It’s going to make Los Angeles County better,” said Melanie Fontes Rainer, who leads strategic planning for L.A. Care.
Funding Challenges and the Road Ahead for Patient Advocacy
Getting the new system up and running by January, as the partners hope, faces challenges. Hospital officials are figuring out how the system will be funded in the long term, and it is unclear how many of the county’s 88 acute care hospitals will ultimately use it. Planners also intend to connect the platform with California state tax databases, enabling hospitals to access more precise patient earnings data than existing frameworks that typically depend on income approximations.
Patient advocates view the countywide push with optimism. “I’m optimistic that we can make a better charity care system,” Walker said. “And the fact that hospitals in LA County are willing to be innovative and creative about ways we can do that is super encouraging.”
While public health officials acknowledge that a better screening system at hospitals will not by itself eliminate medical debt, Shah emphasizes that the department could no longer ignore a problem that affects more county residents than asthma or tobacco use. “Prevention is our bread and butter,” he stated.
